Oil prices crawl back up as the US braces for colder weather

Emma Haslett
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Saudi Arabia announced drastic cuts to its spending (Source: Getty)

Oil prices regained some of their losses as the US braced itself for a bout of cold weather, and following a session of stronger.

Global benchmark Brent crude rose 2.6 per cent to $37.58, while the US equivalent, WTI crude rose 2.31 per cent to $37.64.

States in the Midwest of the US have issued severe weather warnings, with flights cancelled. The weather system is expected to progress to New York and New England.

However, the rallies came a day after Brent crude hovered near an 11-year low, falling to $36.52 during the session. Prices were pushed down after Saudi Arabia announced plans to trim its spending, in order to shrink its $98bn budget deficit.

Although trading in China and the US looked encouraging, in the UK oil stocks were among the fallers, with BP falling 1.8 per cent to 359.4p and Shell falling 0.2 per cent to 1,553.5p.

"[The] decision from Saudi Arabia to implement its own form of austerity speaks a thousand words regarding its willingness to maintain the depressed crude oil prices through 2016," said Josh Mahony, market analys at IG.

"With some speculating that these latest measures imply a $45 crude price through 2016, there is little reason to believe oil prices – and thus commodity stocks – are going to rebound anytime soon."

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